In the late 1990s and early 2000s, there was an explosion in the issuance of bonds backed by mortgages, also known as mortgage-backed securities (MBSs). The underlying cause of the financial crisis was a combination of debt and mortgage-backed assets.

True or False

Credit Default Swaps are a kind of insurance on bonds.

True or False

In 1999 the Depression-era Glass-Steagall Act (1933) was partially repealed, allowing banks, securities firms, and insurance companies to enter each others markets and to merge, resulting in the formation of banks that were too big to fail .

True or False

By 2007 the steep decline in the value of MBSs had caused major losses at many banks.

True or False

By the summer of 2008 Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation), the federally chartered corporations that dominated the secondary mortgage market (the market for buying and selling mortgage loans) were in serious trouble.

True or False